Auto Loan Calculator – Car Payment, Interest & Sales Tax
How auto loan financing works
Auto loans are amortized installment loans where your monthly payment is calculated based on vehicle purchase price, down payment, trade-in credit, sales tax, loan term, and the lender's annual percentage rate (APR).
Shorter vs. Longer Loan Terms (48 vs. 72+ Months)
While 72-month and 84-month auto loans lower your monthly payment, they drastically increase the total interest paid over time and significantly raise the risk of becoming "underwater" (owing more on the loan than the car is worth due to vehicle depreciation). Financial advisers generally recommend financing for 60 months or fewer.
Frequently asked questions
How does trade-in value affect sales tax?
In many US states, the trade-in allowance is deducted from the vehicle price before calculating sales tax, saving you additional money.
How much down payment should I put down?
Aim for at least 10% to 20% down payment to avoid negative equity when driving a new car off the dealer lot.
Check pre-qualified rates from multiple lenders with zero impact on your credit score.